ICE Canada Review: Canola Ends Up On Weather Concerns

Forecasts calling for a heat wave to hit the already stressed canola crops in western Canada over the next few weeks provided some underlying support for the market, highlighting the yield loss concerns and tight supply outlooks that have taken prices higher recently, said an analyst.

A slightly weaker tone in the Canadian dollar, which was down by about a quarter of a cent, also provided some underlying support for canola values.

Gains in Chicago soybeans helped add to the firmer tone in canola throughout most of the session. However, soybeans turned mixed by the close tempering the upside in canola, according to traders.

Activity in canola was on the quiet side, with only routine exporter and domestic crusher pricing noted.

The November canola contract also ran into stiff overhead resistance near the C$440.00 per ton level, with buying slowing down at the key chart point, according to an analyst. If prices did manage to move past that level, he said the next upside target would come in around C$460.00 per ton.

Light farmer selling, encouraged by cash prices topping C$10.00 per bushel across much of western Canada, also limited the upside in the futures, according to traders.

About 6,665 contracts traded on Monday, which compares with Friday when an estimated 12,175 contracts traded. Spreading accounted for about 512 of the contracts traded.

Western barley futures were untraded and unchanged on Monday, lacking any clear direction.

Prices are in Canadian dollars per metric ton.

Settlement